Looking for expert help with GST and income tax for fishing boat owners India? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
Key Takeaways
- Fishing vessels (8902) and their parts are 5% GST, and so are fishing nets (5608), twine and ropes, hooks and line tackle (Notification 9/2025-CT(R), Schedule I, S. Nos. 467, 472, 356, 355, 500 and 501), in force from 22 September 2025.
- Fresh, chilled and loose frozen fish is nil-rated (Notification 10/2025-CT(R), S. Nos. 11 to 14). A boat owner selling only that catch doesn't need GST registration (Section 23(1)(a), CGST Act).
- Diesel is outside GST (Section 9(2)), so there's no GST credit on your biggest running cost.
- Fishing profit is business income, not agricultural income. Boats depreciate at 20%, and Section 44AD (Section 58 of the 2025 Act) works for smaller owners.
- Fish merchants may pay the producer in cash above Rs 10,000 a day (Rule 26(1)(e)(iii), Income-tax Rules 2026). That exception doesn't cover cash you pay to your crew.
What is the GST rate on fishing boats and fishing nets? 5%. Fishing vessels of heading 8902 are at S. No. 467 and their parts at S. No. 472 of Schedule I to Notification 9/2025-Central Tax (Rate). Made up fishing nets (5608) are 5% at S. No. 356. Fresh and chilled fish sold from the boat is nil-rated, so most owners pay GST on what they buy but charge none.
A boat owner's tax position is unusual. You buy a boat, nets, ice and spares that carry GST, fill up with diesel that sits outside GST, and sell a catch that's nil-rated. That means you usually can't register, can't claim input credit and still have to keep clean books for income tax, because buyers, banks and the tax department see your sales through auction slips and bank credits. This guide covers GST law in force from 22 September 2025 and income tax for FY 2025-26 (AY 2026-27) under the Income-tax Act 1961, with the Income-tax Act 2025 numbers that apply from 1 April 2026.
GST rates on boats, nets and fishing gear
Most of what a fishing boat owner buys sits in the 5% slab. Engines bought on their own and plain rowing boats are the main exceptions.
Comparison
GST on Fishing Boats, Gear and Supplies from 22 September 2025
| Item (HSN) | GST | Entry |
|---|---|---|
| Fishing vessels; factory ships and vessels for processing or preserving fishery products (8902) | 5% | 9/2025-CT(R) Schedule I, S. No. 467 |
| Parts of vessels of headings 8901, 8902 and 8904 to 8907 (any chapter) | 5% | Schedule I, S. No. 472 |
| Knotted netting; made up fishing nets of textile materials (5608) | 5% | Schedule I, S. No. 356 |
| Twine, cordage, ropes and cables (5607) | 5% | Schedule I, S. No. 355 |
| Fishing hooks (9507) | 5% | Schedule I, S. No. 500 |
| Fishing rods, line tackle, fish landing nets (9507) | 5% | Schedule I, S. No. 501 |
| Wooden oars, paddles and rudders for boats (4421) | 5% | Schedule I, S. No. 306 |
| Ice (2201 90 10) | 5% | Schedule I, S. No. 147 |
| Rowing boats and canoes (8903) | 18% | Schedule II, S. No. 554 |
| Diesel engines (8408), other than fixed speed engines up to 15 HP | 18% | Schedule II, S. No. 395 |
| Petrol (spark-ignition) engines (8407), including petrol outboard motors | 18% | Schedule II, S. No. 394 |
| High speed diesel | Outside GST | Section 9(2), CGST Act |
Source: Notification 9/2025-Central Tax (Rate), 17 September 2025, in force 22 September 2025. IGST on inter-State purchases is the same total rate.
Two practical points:
- A complete boat and a loose engine aren't the same entry. A boatyard that delivers a finished fishing vessel bills it under 8902 at 5%. An engine bought separately for repowering an old boat is classified on its own under 8408 (diesel) or 8407 (petrol), which are 18%. S. No. 472 covers "parts" of vessels. If a dealer bills a loose marine engine at 5% as a vessel part, ask them to put the classification basis in writing, because you can't fix their invoice later.
- Country craft without an engine may not be 8902. Rowing boats and canoes have their own entry at 18%. The heading depends on what the boat is built for, so check the classification with the builder before you pay.
Fish sales are nil-rated. Live fish (S. No. 11), fresh or chilled fish (S. No. 12) and fresh or chilled fillets, crustaceans and molluscs (S. No. 13) are all in Notification 10/2025-CT(R). Frozen, dried and salted fish stays nil (S. No. 14) unless it's pre-packaged and labelled, which is 5% (9/2025-CT(R), Schedule I, S. No. 3). Our seafood processors guide explains the packaging test.
Do you need GST registration as a boat owner?
Usually not. Section 23(1)(a) of the CGST Act says a person "engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax" isn't liable to register. If all you sell is your catch, fresh or loose frozen, that's you, whatever your turnover.
It changes the moment you add a taxable line.
Aggregate turnover under Section 2(6) of the CGST Act includes exempt supplies. Say you sell Rs 45,00,000 of fresh fish and start selling Rs 3,00,000 of packed, labelled frozen fish at 5%. Your aggregate turnover is Rs 48,00,000. That's above both the Rs 20 lakh limit for services and the Rs 40 lakh limit for suppliers exclusively of goods, so you register. Telangana is outside the Rs 40 lakh notification, so the limit there is Rs 20 lakh. Our registration limit guide has the State list.
What being unregistered costs you. Input tax credit is only for registered persons (Section 16(1)). Say you buy a new fishing vessel from a boatyard for Rs 40,00,000 plus 5% GST of Rs 2,00,000, and nets for Rs 2,00,000 plus Rs 10,000 GST. The Rs 2,10,000 of GST is part of your cost. For income tax, it gets added to the cost of the boat and nets, so you recover some of it through depreciation.
Income tax: business income, not agricultural income
Fishing profit doesn't qualify as agricultural income. Section 2(1A) of the 1961 Act (Section 2(5) of the 2025 Act) limits agricultural income to rent or revenue from land in India used for agricultural purposes, and income from that land. A boat at sea isn't land, so your profit is taxed as business income at slab rates.
The good news is that your real costs are deductible if you keep books: diesel, ice, crew wages or catch shares, repairs, harbour and auction charges, insurance, loan interest and depreciation.
Depreciation on the boat. Appendix I to the Income-tax Rules 2026, Part A, item IV lists three kinds of vessel, all at 20%: ocean-going ships including "fishing vessels with wooden hull", vessels ordinarily operating on inland waters, and speed boats on inland waters. Under Section 33(4) of the 2025 Act (second proviso to Section 32(1) of the 1961 Act), only half the rate is allowed if you buy the asset and use it for less than 180 days in the year.
Step-by-Step Guide
Depreciation on a New Fishing Boat (FY 2026-27)
Actual cost
Boat Rs 40,00,000 plus Rs 2,00,000 GST that you can't claim as credit. Actual cost for income tax: Rs 42,00,000.
Put to use
The boat goes to sea on 15 November 2026. That's 137 days to 31 March 2027, less than 180, so Section 33(4) halves the 20% rate.
Year 1 claim
10% of Rs 42,00,000 = Rs 4,20,000. Written down value carried forward: Rs 37,80,000.
Year 2 claim
Full 20% of Rs 37,80,000 = Rs 7,56,000, if you're still filing on books in FY 2027-28.
Under Section 44AD
No separate depreciation. Section 44AD(2) treats it as already allowed in the deemed profit, but the written down value still reduces as if you'd claimed it.
Source: Income-tax Act 2025, Section 33(3)(a) and 33(4); Income-tax Rules 2026, Appendix I, Part A, item IV
Section 44AD for smaller boat owners
If you're a resident individual, HUF or partnership firm (not an LLP), you can declare presumptive profit instead of keeping full books.
Comparison
Section 44AD for a Fishing Boat Owner
| Point | Rule |
|---|---|
| Turnover limit | Rs 2 crore, or Rs 3 crore if cash receipts are within 5% of turnover |
| Deemed profit | 6% of bank, UPI and other digital receipts; 8% of cash receipts |
| Boat and net depreciation | Not allowed separately (Section 44AD(2)) |
| Opting out | No return to 44AD for the next five years (Section 44AD(4)) |
| From 1 April 2026 | Section 58 of the Income-tax Act 2025, same rates and limits |
Source: Income-tax Act 1961, Section 44AD; Income-tax Act 2025, Section 58
Example: a trawler owner's FY 2025-26 sales are Rs 1,50,00,000. Rs 1,20,00,000 came into the bank from exporters and processing plants, and Rs 30,00,000 was cash at the harbour auction. Cash is 20% of turnover, so the Rs 2 crore limit applies, and Rs 1.5 crore is within it. Deemed profit is 6% of Rs 1.2 crore (Rs 7,20,000) plus 8% of Rs 30 lakh (Rs 2,40,000), so Rs 9,60,000. Under the new regime: nil up to Rs 4 lakh, Rs 20,000 on Rs 4 to 8 lakh and 10% of Rs 1,60,000 (Rs 16,000) on the rest, so Rs 36,000. Total income is within Rs 12 lakh, so the Section 87A rebate (up to Rs 60,000) wipes it out and the tax is nil.
Moving the Rs 30 lakh of auction cash to bank or UPI would cut the deemed profit by 2% of that amount, to Rs 9,00,000, and push the turnover limit to Rs 3 crore. A bad season is the other case to think about. If your real profit was well below the deemed figure, you can file on books instead, but check the tax audit rules and the five-year lock first. Our Section 44AD guide explains both.
Cash at the harbour: what the Rs 10,000 rule allows
A business normally can't deduct a cash expense above Rs 10,000 paid to one person in a day: Section 40A(3) of the 1961 Act, and Section 36(4) of the 2025 Act from 1 April 2026.
- Buyers paying you. Rule 26(1)(e)(iii) of the Income-tax Rules 2026 (Rule 6DD(e) of the 1962 Rules) exempts payments for "fish or fish products" made to the "cultivator, grower or producer". You catch the fish, so you're the producer, and a merchant can pay you cash above Rs 10,000 without losing the deduction. A commission agent reselling your catch to a processor doesn't get the same cover.
- You paying your crew. No fish exception applies here. A Rs 25,000 cash catch share paid to one crew member in a day can be disallowed in your books. Rule 26(1)(g) helps only if the village or town where you pay isn't served by any bank on that date. UPI or bank transfer is the clean option. Our Section 40A(3) guide lists the other exceptions.
Fishing cooperatives. If your boats sell through a registered fishermen's cooperative, the society can deduct the whole profit from "fishing or allied activities", including catching, curing, processing, storing and marketing fish (Section 80P(2)(a)(vii) of the 1961 Act, Section 149(2)(a)(vii) of the 2025 Act). Section 149(3) limits this to societies whose voting rights are restricted to members who carry on fishing, financing cooperative credit societies and the State Government. Our Section 80P guide covers the rest.
Return due dates. For tax year 2026-27 under the 2025 Act, a business return without audit is due 31 August 2027, and 31 October 2027 if audited (Section 263(1)(c)).
Common mistakes boat owners make
- Registering for GST when you sell only fresh fish. You can't charge GST on nil-rated fish, and registration brings monthly returns with nothing to collect. Section 23(1)(a) keeps you out.
- Forgetting exempt sales count once you add a taxable line. Packed, labelled frozen fish or other taxable sales bring Section 22 into play, and your fresh-fish turnover counts towards the limit.
- Accepting a 5% bill on a loose engine without a basis. Engines have their own 18% entries. A complete fishing vessel is 5%.
- Treating fishing profit as agricultural income. It isn't land income, so it's taxable.
- Paying crew catch shares in cash above Rs 10,000 a day. The fish-producer exception only covers what buyers pay you.
- Claiming boat depreciation under Section 44AD. It's already built into the 6% or 8% deemed profit.
How Tax Garden helps fishing boat owners
We sort your sales into auction cash, bank receipts and any taxable lines, so you know whether you need GST registration and when. If you do, our GST registration service handles it. Our bookkeeping service records diesel, ice, crew shares and repairs and keeps a depreciation schedule for every boat. Before filing through our ITR filing service, we compare your books with Section 44AD. Fish farmers can read our aquaculture guide, and ice plant owners our ice factory guide. The depreciation rate guide covers your other assets. Call or WhatsApp us on 9640290977.
